Priciples of Marketing

by Philip Kotler and Gary Armstrong

Chapter 16
Personal Selling and Sales
Promotion

PEARSON
Objective Outline
Personal Selling
Discuss the role of a company’s salespeople in
1 creating value for customers and building customer
relationships.

Managing the Sales Force

2 Identify and explain the six major sales force
management steps.
Objective Outline

The Personal Selling Process

Discuss the personal selling Process, distinguishing
3
between transaction-oriented marketing and
relationship marketing.

Sales Promotion
4 Explain how sales promotion campaigns are
developed and implemented.
Personal Selling

 Companies around the world use sales forces to

sell products and services to business customers
and final consumers.
 But sales forces are also found in many other
kinds of organizations.
The Nature of Personal Selling

• We define personal selling as personal presentations by the

• Salesperson
firm’s sales force
is an for the purpose
individual who of making sales
represents and to
a company
customers by performing
building customer one or more of the following
relationships.
• activities:
People hold prospecting, communicating,
many stereotypes selling, servicing,
of salespeople─including
information gathering,
some unfavorable ones.and relationship building.
• At one extreme,
Today, a salesperson
most salespeople might be largely
are well-educated and an order taker.
well-trained
• At the other extreme
professionals who addarevalue
order
forgetters, whose
customers andpositions
maintaindemand
creative
long-term selling and relationship
customer relationships.building for products and
services ranging from appliances, industrial equipment, and
airplanes to insurance and information technology services.
The Role of the Sales Force
Linking
Salespeople • In many
the can probe customers to learn
cases,more
salesabout
people serve two
their problems and then adjustmasters─the
Company the marketing
selleroffer andbuyer.
and the
presentation
with Its • First, they
to fit each customer’s special needs.the company to
represent
Customers customers.
 In most firms, however, the• sales
Then,force
they plays a major
represent role. to the
customers
 It works with wholesalers andcompany.
retailers to gain their
support and help them be more effective in selling the
• At
company’s products to final buyers.
the most basic level, it can increase
communications between the two groups
Coordinating by arranging joint meetings and spelling
Marketing out communications channels.
and Sales • A company can also create joint
objectives and reward systems for sales
and marketing teams or appoint
marketing-sales liaisons
Managing the Sales Force
 We define sales force management as analyzing,
planning, implementing, and controlling sales force
activities.
 It includes designing sales force strategy and structure, as
well as recruiting, selecting, training, compensating,
supervising, and evaluating the firm’s salespeople.
Designing the Sales Force Strategy and
Structure
 In this section, we divide three aspects to discuss:
the sales force structure, sales force size, and
other sales force strategy and structure issues.
The Sales Force Structure

Customer
Complex sales (or
force
Product salessales
Territorial force
market) sales force
structure
structure
force structure
structure
• A sales force organization in which
that salespeople
assigns specialize
each salesperson to in
an
• When
selling aonly
exclusive company sellsterritory
atoportion
certain
geographic ofa the
wide
customers variety
company’s
in or ofproducts
products
industries.
which that ortolines.
salespersonmany types
sells
• of customers
theall,
Separate
In salesover
company’s
a company forcesaline.
fullas broad
may and
large geographic
be set up forarea,
complex it often
different
as GE combines
industries,
might have
• several
serving
dozens types
It also increases
current
of ofcustomers
separateorganization.
thesales
salesperson’s
versus
forces desireitsto
finding
serving build
new local
ones,
diverse andcustomer
product serving
and
major
service accounts
portfolio.
relationships versus
that, regular
in turn, accounts.
improve selling effectiveness.
Sales Force Size
 Many companies use some form of workload approach to
set sales force size.
 Using this approach, a company first groups accounts into
different classes according to size, account status, or other
factors related to the amount of effort required to
maintain the account.
 It then determines the number of salespeople needed to
call on each class of accounts the desired number of times.
Other Sales Force Strategy and Structure
Issues
• A company may have an outside sales force (or field sales
force), an inside sales force, or both.
• Outside sales force─Salespeople who travel to call on
customers in the field.
• Inside sales force─Salespeople who conduct business from
their offices via telephone, the Internet, or visits from
prospective buyers.

• Team Selling─Using teams of people from sales, marketing,

engineering, finance, technical support, and even upper
management to service large, complex accounts.
• Instead, most companies now use team selling to service large,
complex accounts.
Recruiting and Selecting Salespeople
 Its research suggests that the best salespeople
possess four key talents:

Intrinsic motivation

A disciplined work style

The ability to close a sale

The ability to build relationships

with customers
Training Salespeople
 Training programs have several goals.
• Salespeople need to know about customers and how to build
relationships with them.
• An effective training program teaches them about the
company’s objectives, organization, products, and the
strategies of major competitors.
• Online training may range from simple text-based product
training and Internet-based sales exercises that build sales
skills to sophisticated simulations that re-create the dynamics
of real-life sales calls.
Compensating Salespeople
 Compensation consists of four elements: a fixed amount,
a variable amount, expenses, and fringe benefits.
 Different combinations of fixed and variable
compensation give rise to four basic types of
compensation plans:
Salary
Straight Salary
Straight plus
commiss plus
salary commiss
ion bonus
ion

 Compensation should direct salespeople toward activities

that are consistent with the overall sales force and
marketing objectives.
Supervising and Motivating Salespeople
 The goal of supervision is to help salespeople “work
smart” by doing the right things in the right ways.
 The goal of motivation is to encourage salespeople to
“work hard” and energetically toward sales force goals.
 If salespeople work smart and work hard, they will realize
their full potential—to their own and the company’s
benefit.
Supervising Salespeople

 One tool is the weekly, monthly, or annual call

plan that shows which customers and prospects
to call on and which activities to carry out.
 Another tool is time-and-duty analysis.
Selling and the Internet
 Sales organizations are now both enhancing their
effectiveness and saving time and money by using a host
of innovative Internet approaches to train sales reps, hold
sales meetings, service accounts, and conduct sales
meetings with customers.
 They help conserve salespeople’s valuable time, save
travel dollars, and give salespeople a new vehicle for
selling and servicing accounts.
Motivating Salespeople

 Organizational climate describes the feeling that

salespeople have about their opportunities, value,
and rewards for a good performance.
 Sales quota is a standard that states the amount a
salesperson should sell and how sales should be
divided among the company’s products.
Evaluating Salespeople and Sales Force
Performance
• The most important source is sales reports, including weekly
or monthly work plans and longer-term territory marketing
plans.
• Salespeople also write up their completed activities on call
reports and turn in expense reports for which they are partly
or wholly reimbursed.

• Formal evaluation forces management to develop and

communicate clear standards for judging performance.
• It also provides salespeople with constructive feedback and
motivates them to perform well.
The Personal Selling Process

 Selling process is the steps that salespeople

follow when selling, which include prospecting
and qualifying, preapproach, approach,
presentation and demonstration, handling
objections, closing, and follow-up.
Steps in the Selling Process


Presentation
Prospecting
The selling• process
During consists
The firstthis
stepstep of
of the
in the seven
selling
selling steps:
process,
process is the salesperson
and
prospecting tells
and the “value story”
qualifying,
prospecting─identifying to the
preapproach, buyer,potential
qualified showingcustomers.
how the
Demonstrati
Qualifying
approach, company’s offer
presentation and solves the customer’s problems.
demonstration,
on • The last step in the selling process is necessary if the
handling objections,
salesperson
•• Before closing,
callingwants
on a toand
ensure
prospect,follow-up.
customer
the satisfaction
salesperson should
In this step,
and repeat the salesperson
business. should use a positive
learn as
approach, much
seek asout
possible
hidden about organization
objections, ask the (what
buyerit
Follow-Up
Preapproach
Handling • needs,
The salesperson then should schedule a follow-up
to who
clarify anyis involved
objections, in the
take buying) and
objections its buyers
as
Objections call after
(their the buyer receives
characteristics and the initial
buying order to make
styles).
opportunities to provide more
sure proper installation, information,
instruction, and turn
and servicing
the objections into reasons for buying.
occur.
• During this step, the salesperson should know how to
• Salespeople can ask for the order, review points of
Approach meet and greet the buyer and get the relationship off a
agreement, offer to help write up the order, ask
good start.
Closing whether the buyer wants this model or that one, or
note that the buyer will lose out if the order is not
placed now.
Personal Selling and Managing Customer
Relationships
• The steps in the just-described selling process are transaction
oriented—their aim is to help salespeople close a specific sale
with a customer.
• The sales force usually plays an important role in customer
relationship building.

• Instead, most companies want their salespeople to practice

value selling—demonstrating and delivering superior
customer value and capturing a return on that value that is fair
for both the customer and the company.
• Value selling requires listening to customers, understanding
their needs, and carefully coordinating the whole company’s
efforts to create lasting relationships based on customer value.
Sales Promotion

 Sales promotion consists of short-term

incentives to encourage the purchase or sales of a
product or service.
 Whereas advertising offers reasons to buy a
product or service, sales promotion offers reasons
to buy now.
The Rapid Growth of Sales Promotion
 Several factors have contributed to the rapid
growth of sales promotion, particularly in
consumer markets.
First, inside the company, product managers face greater pressures
to increase current sales, and they view promotion as an effective
short-run sales tool.
Second, externally, the company faces more competition, and
competing brands are less differentiated. Increasingly, competitors
are using sales promotion to help differentiate their offers.

Third, advertising efficiency has declined because of rising costs,

media clutter, and legal restraints. Finally, consumers have become
more deal oriented.
Sales Promotion Objectives
 Sellers may use consumer promotions to urge short-term
customer buying or boost customer brand involvement.
 Objectives for trade promotions include getting retailers
to carry new items and more inventory, buy ahead, or
promote the company’s products and give them more
shelf space.
 Business promotions are used to generate business leads,
stimulate purchases, reward customers, and motivate
salespeople.
Major Sales Promotion Tools

 Many tools can be used to accomplish sales

promotion objectives.
 Descriptions of the main consumer , trade, and
business promotion tools follow.
Consumer Promotions
Advertising
Premiums
Specialties Coupons
 Consumer
Samples promotions are sales promotion tools
• They are goods offered either
used
• free or to
Sampling boost
is the
at low short-term
as an • It also
costmost customer buying and
called promotional
involvement
effective—but
incentive to buy aor
most enhance
product.
Point-of-purchase • are
long-term
products, Couponscustomer
useful are certificates that
articles
• A expensive—way
relationships.
premium may (POP)come insideimprinted
topromotions
introduce a
the with
savean advertiser’s
buyers money when they
new product
package or create
(in-pack), outsidenewthe
name, logo,purchase specified
or message products.
that are
excitement
package •forThey
(on-pack), orinclude
an existing displays
one.
throughgiven and to consumers.
as gifts
the mail. demonstrations that take place at
Rebates the point of sale. Price packs
(cash refunds) • Contests, sweepstakes, and deals)
(cents-off
games give consumers the chance
• It offer consumers savings off
• Rebates are like to coupons
win something,
except such as cash,
the regular price of a product.
trips, or goods,
that the price reduction occursby luck or through
• The producer marks the reduced
extrarather
after the purchase effort.than at
prices directly on the label or
the retail outlet.
package.
Consumer Promotions

 Event marketing (or event sponsorships)

creates a brand-marketing event or serving as a
sole or participating sponsor of events created by
others.
Trade Promotions
 Trade promotions can persuade resellers to carry a brand,
give it shelf space, promote it in advertising, and push it
to consumers.
 Shelf space is so scarce these days that manufacturers
often have to offer price-offs, allowances, buy-back
guarantees, or free goods to retailers and wholesalers to
get products on the shelf and, once there, to keep them on
it.
Business Promotions
 Business promotions are used to generate business leads,
stimulate purchases, reward customers, and motivate
salespeople.
 Many companies and trade associations organize
conventions and trade shows to promote their products.
 A sales contest is a contest for salespeople or dealers to
motivate them to increase their sales performance over a
given period.
Developing the Sales Promotion Program
Beyond selecting the types of promotions to use,
marketers must make several other decisions in
designing the full sales promotion program.

First, they must determine the size of the

incentive.

The marketer also must set conditions for

participation.

Marketers must determine how to promote and

distribute the promotion program itself.

To use it well, the marketer must define the sales

promotion objectives, select the best tools, design the
sales promotion program, and evaluate the results.
The End